FTSE Higher on Greek Debt and M&A

Hopes of a deal to solve Greece’s financial crisis and a spate of takeover talk have between them helped lift markets from their recent doldrums.

The FTSE 100 is currently up 80.46 points at 6790.9, although off its best levels on talk that Greece had last night submitted the wrong document to its eurozone partners. The original document had apparently gone some way to breaking the deadlock between Greece and its creditors, so a hitch of this nature has revived the doubts about whether a deal will actually be done.

Meanwhile Sky has jumped 44p or 4% to £10.82 following a Sunday Telegraph report that the Murdoch family had turned down offers from Vivendi and Vodafone for their stake in the business. The Murdochs apparently wanted £18 a share for their 39% in the satellite broadcaster, which appears to have been a sticking point.

Analysts at Liberum said a deal might still happen given the issue seemed mainly about price, but despite reports Murdoch’s Fox might decide to make a bid itself, Liberum believed this seemed less likely:

(1) Both [bidders] seem credible…although there are limited synergies trans-borders for pay-tv (Vivendi has Canal+, the main French pay-tv operator) and it makes more strategic sense for Vodafone to own Virgin Media as it gives its own broadband infrastructure.

(2) the fact that the talks reportedly broke down over price rather than the principle of selling the stake suggests the Murdochs are open to a deal.

(3) it suggests a bid by Fox for the rest of Sky is less likely – it would be hard for Fox to argue that Vivendi should pay £18 a share for Sky without offering a similar amount to other shareholders, and we do not see Fox doing this.

via The Guardian

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza